Accountancy software supplier Sage has bought German vendor KHK after a protracted haggle over price.
It is paying #40.1 million for KHK, the largest supplier of branded PC accounting software in Germany, with 1995 sales of #27.5 million.
KHK operates a total of 18 offices in Germany, Switzerland and Austria.
The German accounting software market is very fragmented, and most of KHK?s competitors are small and regional, according to Sage.
The software supplier is to replace KHK?s current licensing model, which is based on master licence agreements with resellers, in favour of individual customer licences.
The company will also bolster KHK?s marketing, distribution and product development. The local management team will remain in place.
Negotiations between the two companies had been going on for some time, but discussions had, until now, stalled over an agreement on price.
Jyoti Bannerjee, managing director of Tate Bramald Consultancy, an adviser to the accounting software industry, said. ?This is one more step in the consolidation of the market. These days, if you don?t do anything about moving out of your local market and going international, you suffer and someone buys you.
?But the deal has consolidated Sage?s position in the small to medium-sized business market, not changed it.?
Sage is funding the deal through an unsecured loan facility, repayable over five years.
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